Investors receive regular monthly cash flow potential and tax deferral
with principal protection at maturity
TORONTO, April 5 /CNW/ - Guardian Group of Funds Ltd. (GGOF) today
announced the launch of Bank of Montreal GGOF C.O.R.E. Protected Deposit Notes
High Yield Bond R.O.C. Class, Series 3 and 4, based on the performance of GGOF
High Yield Bond Fund.
Investors in the Deposit Notes will obtain 100 per cent exposure to the
potential distributions and capital appreciation of GGOF High Yield Bond Fund,
managed by Steve Kearns of Guardian Capital LP (GCLP). Mr. Kearns has managed
GGOF High Yield Bond Fund, the second largest active Canadian high yield bond
fund, since its inception in January 1999.
These new Deposit Notes offer investors the opportunity to participate in
the returns of this Fund while 100 per cent of their principal is protected if
held to maturity by Bank of Montreal as issuer. The Deposit Notes make
potential monthly distributions in the form of Return of Capital (R.O.C.), a
more tax-efficient form of distribution than interest income. Seventy-five per
cent of the distribution rate of GGOF High Yield Bond Fund will take this
form, with the remaining 25 per cent of the distributions notionally invested
in the Fund for growth. Series 3 of the Deposit Notes will be available until
May 11, 2007 and series 4 will be available until June 29, 2007.
Why invest in high yield bonds?
High yield bonds are unique because they combine some of the best
features of both income and equity products. They have a lower correlation to
interest rates than investment grade bonds and can therefore provide valuable
portfolio diversification. High yield bonds also have greater potential for
price appreciation than investment grade bonds, which provide them with the
potential to generate positive returns in most market environments.
"Carefully selected high yield bonds can also benefit from upgrades by
credit ratings agencies as their financial position improves, adding to the
possibility of positive returns unrelated to interest rates movements," said
Gavin Graham, Chief Investment Officer, GGOF. "Steve Kearns has demonstrated
an excellent track record in managing the fund's credit exposure since its
inception in 1999."
Benefits of Return on Capital (R.O.C.)
Fixed income funds normally distribute interest income, however,
distributions are more tax-efficient when made as R.O.C. because they don't
need to be taken into income in the year received. This allows investors to
not only defer taxation, but also to determine the timing of their tax
liability since tax is paid when the note matures or is sold.
GGOF provides investors with a full product line of 34 mutual funds,
diversified by asset class, geographic region and capitalization. GGOF, with
$6.1 billion of mutual fund assets under management at February 28, 2007,
offers its funds exclusively through financial intermediaries.
GGOF is a member of BMO Financial Group and part of the organization's
Private Client Group. BMO's Private Client Group provides integrated wealth
management services in Canada and the United States and had total assets under
management and administration and term investments of $296.5 billion as at
January 31, 2007.
For further information:
For further information: Gavin Graham, GGOF, (416) 350-3151; JoAnne
Hayes, BMO Financial Group, (416) 867-3996; Internet: www.ggof.com